1. Earnings related pension system in graphs and figures
The slideshow includes key information of the Finnish earnings-related pension system

2. Pension System and Governance

3. Social security insurance in 2015, 39 bnEUR
FINNISH CENTRE FOR PENSIONS

4. Pension insurance in Finland in 2015
National pension in proportion to premium income and expenditure.
FINNISH CENTRE FOR PENSIONS

5. Basic pension provision
FINNISH CENTRE FOR PENSIONS

6. Total pension in 2017 FINNISH CENTRE FOR PENSIONS
Single retiree, earnings-related pension is assumed to be 50 per cent of wages.
The national and guarantee pensions start at the of age 65, but the earnings-related pension is taken into consideration until the age of 63.
Net pension means the total pension in hand after taxation, assumed that the pension recipient does not have any other income.
FINNISH CENTRE FOR PENSIONS

7. Earnings-related pensions paid in 2016
Pensions paid based on unpaid periods are not included in the pension expenditure by pension law. Instead, they are included in the sector-specific pension expenditure and the total earnings-related pension expenditure.
TyEL = Employees Pensions Act
MEL = Seafarer’s Pensions Act
YEL = Self-employed Persons’ Pensions Act
MyEL = Farmers’ Pensions Act
VaEL = State Employees’ Pensions Act
KuEL= Local Government Pensions Act
KiEL= Evangelical-Lutheran Church Pensions Act
FINNISH CENTRE FOR PENSIONS

8. Earnings-related Pension System – Legislation, Supervision and Execution
Situation in the beginning of year 2017
Other public actors: The Orthodox Church, Bank of Finland, the Government of Åland
Keva handles the pensions of Kela’s employees.
FINNISH CENTRE FOR PENSIONS

9. Preparation and coming into force of earnings-related pension acts
FINNISH CENTRE FOR PENSIONS

10. Determining the Pension

11. Basic pension provision
FINNISH CENTRE FOR PENSIONS

12. Total pension in 2017 FINNISH CENTRE FOR PENSIONS
Single retiree, earnings-related pension is assumed to be 50 per cent of wages.
The national and guarantee pensions start at the of age 65, but the earnings-related pension is taken into consideration until the age of 63.
Net pension means the total pension in hand after taxation, assumed that the pension recipient does not have any other income.
FINNISH CENTRE FOR PENSIONS

13. Total pension in 2017, including housing allowance
Single retiree, earnings-related pension is assumed to be 50 per cent of wages.
The national and guarantee pensions start at the of age 65, but the earnings-related pension is taken into consideration until the age of 63.
Net pension means the total pension in hand after taxation, assumed that the pension recipient does not have any other income.
FINNISH CENTRE FOR PENSIONS

14. FINNISH CENTRE FOR PENSIONS
Pension accrues from the month after the employee turns 17 years and the self-employed person 18 years.
As of 2017, the employee’s earnings-related pension contribution will not be deducted from the wages on which the pension is based.
Pension accrual rates from 2005 to 2016:
1.5% for persons under the age of 53,
1.9% for persons between the ages of 53 and 62 years, and
4.5% for persons between the ages of 63 and 67 years.
FINNISH CENTRE FOR PENSIONS

15. Retirement age rises by birth group
The retirement age of employees born in 1965 and later will be linked to life expectancy. The retirement age will be confirmed by a decree issued by the Ministry of Social Affairs and Health in the year in which the employee turns 62 years.
FINNISH CENTRE FOR PENSIONS

16. Age limits of earnings-related pensions
FINNISH CENTRE FOR PENSIONS

17. Index adjustments secure pension level
The index adjustment amount is affected by the changes in the consumer price and income level index  calculated by Statistics Finland.
In the wage coefficient, the share of change in price level is 20 per cent and the share of wage-earners’ income level is 80 percent.
In the earnings-related pension index, the share of change in price level is 80 per cent and the share of wage-earners’ income level is 20 percent.
FINNISH CENTRE FOR PENSIONS

18. Pension Level

19. Average total pension per 31 Dec. 2016
Pension recipients: Individuals residing in Finland who receive an old-age, disability or a special pension for farmers from the earnings-related or national pension scheme.
The total pension includes the pension in one’s own right and survivors’ pension components.
The total pension includes earnings-related pension, national pension, guarantee pension and special protection pensions components.
The total pension is a gross pension
FINNISH CENTRE FOR PENSIONS
Statistical Yearbook of Pensioners in Finland

20. Total pension distribution of pension recipients per 31 Dec. 2016
Pension recipients: Individuals residing in Finland who receive an old-age, disability or a special pension for farmers from the earnings-related or national pension scheme.
The total pension includes the pension in one’s own right and survivors’ pension components.
The total pension includes earnings-related pension, national pension, guarantee pension and special protection pensions components.
Special protection: Occupational Accidents, Injuries and Diseases Act, Motor Liability Insurance Act, Military Injuries Act, and the Compensation for Military Injuries Act.
The total pension is a gross pension.
FINNISH CENTRE FOR PENSIONS
Statistical Yearbook of Pensioners in Finland

21. Average total pension and its ratio to average earnings in 2000–2016
Pension recipients: Individuals residing in Finland who receive an old-age or disability pension from the earnings-related or national pension scheme.
The total pension includes the pension in one’s own right and survivors’ pension components.
As of year 2008, the national pension no longer includes pensioners’ housing and care allowance components. As of 2011, the national pension includes the guarantee pension component.
The total pension is a gross pension.
The average earning is based on the Income distribution statistics of Statistics Finland, which contains data on average earned and entrepreneurial incomes.
FINNISH CENTRE FOR PENSIONS

22. Average total pension and its ratio to average earnings in 2015–2080
Pension recipients: Individuals residing in Finland who receive an old-age, disability or a special farmer’s pension from the earnings-related or national pension scheme.
The total pension includes the pension in one’s own right and survivors’ pension components.
The total pension includes earnings-related pension, national pension, guarantee pension and special protection pensions components.
Special protection: Occupational Accidents, Injuries and Diseases Act, Motor Liability Insurance Act, Military Injuries Act, and the Compensation for Military Injuries Act.
The average earning is based on data on the insured individuals’ income from work and the number of insured in the earnings and accrual register of the earnings-related pension system.
Statutory pensions in Finland: long-term projections 2016.
Finnish Centre for Pensions, Reports 02/2017.
FINNISH CENTRE FOR PENSIONS

23. Pension Expenditure

24. Earnings-related and Kela pension expenditure in 2016
Part-time pensions (0.1 bnEUR), special pensions for farmers (0.07 bnEUR).
The total pension expenditure of 28.5 bnEUR includes the guarantee pensions (192 mill. EUR), the front-veterans supplement and the child increases (25 mill. EUR) paid by Kela.
FINNISH CENTRE FOR PENSIONS

25. Statutory total pension expenditure in 2011–2016, mEUR
The total pension expenditure includes old-age, disability, unemployment (2010–2014), survivors’ and part-time pensions, as well as special pensions for farmers, paid from different pension systems.
Kela’s pension expenditure includes national pensions, guarantee pensions (as of 2011), front-veterans supplements and child increases.
SOLITA = Occupational Accidents, Injuries and Diseases Act, Motor Liability Insurance Act, Military Injuries Act, and the Compensation for Military Injuries Act
FINNISH CENTRE FOR PENSIONS

26. Pension expenditure, per cent of GDP in 2000–2080
Kela’s pension expenditure includes national and guarantee pensions.
SOLITA = Occupational Accidents, Injuries and Diseases Act, Motor Liability Insurance Act, Military Injuries Act, and the Compensation for Military Injuries Act
VEKL: Act on Compensation for Pension Accrual from State Funds for Periods of Childcare and Periods of Study
Statutory pensions in Finland: long-term projections 2016.
Finnish Centre for Pensions, Reports 02/2017.
FINNISH CENTRE FOR PENSIONS

27. Pension expenditure and contribution rates in proportion to the wage sum under the Employees Pensions Act (TyEL) in 1962–2080
Statutory pensions in Finland: long-term projections 2016.
Finnish Centre for Pensions, Reports 02/2017.
The realised and projected development of private-sector employees’ pension expenditure and contributions in proportion to the equivalent wage sum.
Statutory pensions in Finland: long-term projections 2016.
Finnish Centre for Pensions, Reports 02/2017.
FINNISH CENTRE FOR PENSIONS

28. Insured for Earnings-related Pension Benefits

29. All persons aged 18–68 years covered by the earnings-related pension scheme on 31 Dec. 2015
The figures in the graph indicate the status of individuals covered by the earnings-related pension scheme at the time of section (31 December).
Persons insured for an earnings-related pension in Finland
FINNISH CENTRE FOR PENSIONS

30. Insured for earnings-related pension, by pension act on 31 Dec. 2015
The figures depict the number of individuals in employment or self-employment on 31 December.
A person may be insured under several different pension acts simultaneously. In the total amount (2.3 million), each individual is counted only once.
Other public-sector acts and actors : KiEL, OrtKL, KELA, SP and the Åland Government
The Local Government Pensions Act (KuEL) covers 29,000 elected officials, family caregivers, private care-providers etc.
The State Employees’ Pensions Act (VaEL) covers 4,000 elected officials, consultants etc.
TyEL = Employees Pensions Act
MEL = Seafarer’s Pensions Act
YEL = Self-employed Persons’ Pensions Act
MyEL = Farmers’ Pensions Act
VaEL = State Employees’ Pensions Act
KuEL= Local Government Pensions Act
KiEL= Evangelical-Lutheran Church Pensions Act
OrtKL = Orthodox Church Act
SP = Pension regulation for the Bank of Finland
KELA = Pension regulation for Kela
Pension regulation for the regional government of Åland
FINNISH CENTRE FOR PENSIONS
Persons insured for an earnings-related pension in Finland

31. Pension Recipients

32. All pension recipients on 31 Dec. 2016
Part-time pension 10,000, special pension for farmers (farm closure pension and farmers’ early retirement aid) 14,000, orphan’s pension 18,000.
The figures include all individuals receiving a pension from the earnings-related or national pension scheme.
1,499,000 pension recpients resided in Finland while 60,000 resided abroad.
FINNISH CENTRE FOR PENSIONS
Statistical Yearbook of Pensioners in Finland

33. Pension recipients by pension structure in 1996–2016
The figures in the graph include recipients of old-age, disability, unemployment (1995–2014) and special pension for farmers residing in Finland receiving pension from statutory earnings related or national pension scheme.
Reduced national pensions were no longer paid after 1 January As of that date, approximately 300,000 pension recipients, who had received both an earnings-related and a national pension, received only an earnings-related pension.
Statistical Yearbook of Pensioners in Finland
FINNISH CENTRE FOR PENSIONS

34. Total population and pension recipients on 31 Dec. 2016
Pension recipients: individuals residing in Finland who receive an old-age, disability, survivors’ and part-time pension, as well as farmer’s special pension, paid from the statutory earnings-related or national pension schemes.
Population: Population insured by Kela
Statistical Yearbook of Pensioners in Finland
FINNISH CENTRE FOR PENSIONS

35. Recipients of disability pension by main disease category in 2007–2016
The figures include individuals residing in Finland who have received a disability pension from the earnings-related or national pension schemes.
The disability pensions include the actual disability pensions and the individual early retirement pensions (in 2005–2010).
Actual disability pension: A pension granted until further notice or a cash rehabilitation benefit (fixed-term disability pension). Both can be granted allso to the amount of a partial pension in the earnings-related pension scheme.
Statistical Yearbook of Pensioners in Finland
FINNISH CENTRE FOR PENSIONS

36. Retirees on Earnings-related Pensions and Effective Retirement Age

37. New retirees on earnings-related pension in 2000–2016, by pension benefit
New retirees on old-age pension includes only persons who have retired directly on old-age pension or whose part-time pension has been converted to an old-age pension.
Individuals who have retired on a part-time pension are not counted as new retirees since receiving part-time pension requires working.
Earnings-related pension recipients in Finland
FINNISH CENTRE FOR PENSIONS

38. New retirees* on disability pension in 2000–2016, by main disease category
The figures in the graph concerns individuals who have retired on an statutory earnings-related pension.
The disability pensions include the actual disability pensions and the individual early retirement pensions (in 2000–2006).
Actual disability pension: a pension granted until further notice and a cash rehabilitation benefit (fixed-term disability pension). Both can be granted allso to the amount of a partial pension.
Earnings-related pension recipients in Finland
FINNISH CENTRE FOR PENSIONS

39. New retirees on earnings-related pension in 2000–2016, by age group and average age
The figures in the graph concerns individuals who have retired on an statutory earnings-related pension.
New retirees on old-age pension (includes only persons who have retired directly on old-age pension or whose part-time pension has been converted to an old-age pension), disability pension, unemployment pension (2000–2011) and special pension for farmers.
Individuals who have retired on a part-time pension are not counted as new retirees since receiving part-time pension requires working.
FINNISH CENTRE FOR PENSIONS
Earnings-related pension recipients in Finland

40. New retirees on earnings-related pension in 2016, aged 50–68
The figures in the graph concerns individuals who have retired on an statutory earnings-related pension.
Effective retirement age in the Finnish earnings-related pension scheme
FINNISH CENTRE FOR PENSIONS

41. Effective retirement age, earnings-related pension scheme in 2000–2016
The figures in the graph concerns individuals who have retired on an statutory earnings-related pension.
New retirees on old-age pension (includes only persons who have retired directly on old-age pension or whose part-time pension has been converted to an old-age pension), disability pension, unemployment pension (2000–2011) and special pension for farmers.
The figures in the graph do not include new retirees on part-time pension.
The median age is the middle observation of the data, i.e. half of the new retirees are younger than this while half are older.
The average age is the arithmetical average age of the new retirees.
The expected effective retirement age is an indicator developed a longside the traditional average and median age. It is better suited to monitor the changes in retirement ages. The expected effective retirement age is the average retirement age, which is formed for insured individuals of a certain age if the age-cohort-specific retirement and mortality rates remain at the level of the review year. The expectancy is independent of age structure. In the graph, the expected effective retirement age has been calculated for a 25-year-old, and it depicts the retirement age of the entire population insured for an earnings-related pension.
FINNISH CENTRE FOR PENSIONS
Effective retirement age in the Finnish earnings-related pension scheme

42. Expected effective retirement age in 1996–2016, earnings-related pension scheme
The expected effective retirement age is an indicator developed alongside the traditional average and median age. It is better suited to monitor the changes in retirement ages.
The expected effective retirement age is the average retirement age, which is formed for insured individuals of a certain age if the age-cohort-specific retirement and mortality rates remain at the level of the review year. The expectancy is independent of age structure.
In the graph, the expected effective retirement age has been calculated for a 25-year-old and a 50-year-old separately. The expectancy for the 25-year-old depicts the retirement age of the entire population insured for an earnings-related pension. The expectancy for a 50-year-old has been calculated based on all insured aged 50.
FINNISH CENTRE FOR PENSIONS
Effective retirement age in the Finnish earnings-related pension scheme

43. Expected effective retirement age in 1996–2050, aims and realization
FINNISH CENTRE FOR PENSIONS

44. Rehabilitation within the Earnings-related Pension Scheme
Rehabilitation within the earnings-related pension scheme is vocational rehabilitation arranged and paid for by the pension providers. The aim of the rehabilitation is to prevent disability and thus improve the preconditions for working when employees are no longer able to continue in their former work due to their state of health.
Vocational rehabilitation is individual and can take the form of a work trial at the workplace, retraining for a new profession or a livelihood support.
During rehabilitation, an income compensation is paid. If you are an emloyee or a self-employed person, you will receive a rehabilitation allowance, but if you are retired, you will receive a rehabilitation increment.
(Only in Finnish)
Työeläkekuntoutus

45. Rehabilitees and age in 2000–2016
In 2016, the average age of rehabilitees was 47 years (women 47 and men 46). Of all rehabilitees, 54 per cent were women.
FINNISH CENTRE FOR PENSIONS

46. Rehabilitation expenses in 2000–2016
FINNISH CENTRE FOR PENSIONS

47. Post-rehabilitation status in 2007–2016
The graph depicts the direct results following rehabilitation that has been completed in the last 10 years. The results are based on data received from pension providers, not the register data of the Finnish Centre for Pensions.
Direct results of rehabilitation
Returned to work: the individual returned to his or her previous work or the planned work as a result of the rehabilitation.
Continued studiying, remained unemployed: The rehabilitation in itself was successful, but the individual continues studying or remains unemployed.
Other: The rehabilitation was terminated, reason unknown; the person has been transferred under the scope of the workers’ compensation insurance or motor liability insurance etc.
Partial disability pension: The individual receives a partial disability pension.
Full disability pension: The individual receives a full disability pension.
FINNISH CENTRE FOR PENSIONS

48. Continuing at work, employees ending rehabilitation in 2011
The graph depicts the status (mainly in terms of the permanence of employment or retirement) of individuals whose rehabilitation ended in The data is based on the registers of the Finnish Centre for Pensions.
Employed The individual is only employed.
Employed and retired: The individual works while being retired. The pension received may be a partial or full disability pension or some other form of pension.
Neither employed nor retired: The individual is unemployed or studies.
Partial disability pension, full disability pension: The individual is only retired and not in employment.
Other: Other pension than disability pension (not in employment), dead.
FINNISH CENTRE FOR PENSIONS

49. Financing of Earnings-related Pensions

50. Financing of pensions, by pension act
State funds are used to finance the expenses of VEKL benefits relating to the care of one’s own child under the age of three or to studying, as well as relating management expenses. The VEKL benefits totalled about EUR 2.6 million in 2015.
FINNISH CENTRE FOR PENSIONS

51. Money flows of earnings-related pension scheme 2016
Source: Finnish Centre for Pensions, Earnings-related pension provaders and
The Finnish Pension Alliance TELA
The Finnish statutory pension provision is financed mainly with earnings-related pension contributions paid by employers, employees, self-employed persons and farmers, as well as a with accrued pension assets and investment returns.
Parts of some of the pensions are financed with state payments and contributions paid by the Unemployment Insurance Fund to the earnings-related pension scheme.
FINNISH CENTRE FOR PENSIONS

52. Earnings-related pension contribution rates in 2017
TyEL = Employees Pensions Act
MEL = Seafarer’s Pensions Act
JuEL (Keva) = Public Sector Pensions Act (local government employees)
JuEL (State) = Public Sector Pensions Act (State employees)
JuEL (Church) = Public Sector Pensions Act (Evangelical Lutheran Church employees)
YEL = Self-employed Persons’ Pensions Act
MYEL = Farmers’ Pensions Act
The Ministry of Social Affairs and Health confirms the earnings-related contribution rates annually.
Keva’s contribution includes the components based on wage and pension expenditure.
In addition to the Church contribution, a pension fund contribution. In 2017, it is 4% of the Church tax.
The contribution rates confirmed for the self-employed and farmers are linked to the average TyEL contribution.
The contribution rate for a self-employed person who has turned 53 is applied as of the beginning of the year after they turn 53 years and continues until the end of the calendar year in which they turn 63 years.
FINNISH CENTRE FOR PENSIONS

53. Average TEL-/TyEL contribution in 1962–2017
Between 1962 and 1992 only employers paid pension contributions. The contribution level was low to begin with but rose as of the 1970s.
Employees started contributing towards their pension in At the same time, it was agreed that any increases to the contributions be divided fifty-fifty between the employer and the employee.
Between 2005 and 2016 the contribution rate of those who had turned 53 years was higher than for younger employees.
The competitiveness pact that took effect as of the beginning of 2017 resulted in a shift of 0.2 percentage points from the employer’s contribution to the employee’s contribution.
FINNISH CENTRE FOR PENSIONS

54. Pension assets and ratio of pension assets to GDP in 2009–2016
Sources:
GDP: Statistics Finland
Pension Assets: The Finnish Pension Alliance TELA
FINNISH CENTRE FOR PENSIONS

55. Investment Operations of Pension Providers

56. Return on earnings-related pension investments at current values in 1998–2016
The current value return is obtained by adding the change in valuation differences during the year to the euro-denominated return minus investment expenses, as shown in the profit and loss account.  The rate of return is obtained by dividing this euro-denominated return by the euro-denominated market value of the investment assets.
The market value of the investment assets, used as the divisor, can be calculated accurately by considering the time that the capital has been tied up in the asset category in question.
FINNISH CENTRE FOR PENSIONS
Source: The Finnish Pension Alliance TELA

57. Earnings-related pension investments, by asset class in 2008–2016
Source: The Finnish Pension Alliance TELA
FINNISH CENTRE FOR PENSIONS

58. Earnings-related pension investments, by region in 2008–2016
Source: The Finnish Pension Alliance TELA
FINNISH CENTRE FOR PENSIONS